Pilsen Clinic Chief Accused Of Fund Misuse

Audit At Mental Health Center

August 25, 1999|By Douglas Holt, Tribune Staff Writer.

Top officials of a mental health center serving Chicago's largest Latino community were accused Tuesday of frittering away more than $200,000 in state money, including under-the-table bonuses, drinks and a banquet during an unauthorized business trip to Puerto Rico, and cellular telephone calls made while on vacation.

At times, the Pilsen-Little Village Community Mental Health Center seemed to be used as a personal bank for Albert Vasquez, its founder, president and chief executive officer, according to a report by Illinois Auditor General William Holland.

In December 1996, the report said, Vasquez took out a $15,000 interest-free loan from the center, prohibited by state law and the center's own policies. He returned the cash 18 months later, only to award himself a $17,500 salary bonus the following week, according to Holland. The bonus had no written authorization, although the center's board chairman said Tuesday it was part of an effort to make staff members' salaries more competitive, including that of Vasquez, who is paid $115,000 a year.

In Christmas bonuses for 1997, the Holland report said the center paid 97 employees more than $20,000 that was wrongly classified as office expenses, and was not reported on the W-2 forms used to calculate personal income taxes of the employees.

The center also failed to disclose $800 in political contributions--an expenditure barred by federal law governing not-for-profit organizations, the audit said.

While none of its findings amounted to criminal conduct, a series of real estate transactions that might have involved undisclosed conflicts of interest were forwarded to Atty. Gen. Jim Ryan's office for review.

"It's outrageous that the tax dollars we so desperately need in the community are being misappropriated," said state Rep. Edward Acevedo (D-Chicago). He called for the audit last year after receiving complaints, including a seven-page letter, that the center was recklessly spending state money.

Acevedo said the center should replace its top staff members and directors or the state should seek a new provider of mental health services for the community.

Vasquez could not be reached Tuesday, but Luis Ortiz, the center's vice president and chief program officer, defended the center's programs that deal with problems including mental health, drug use, AIDS and child abuse.

Founded in 1975 as a non-profit agency, it has more than 120 staff members and serves 2,500 families yearly, he said. More than 90 percent of the center's $4 million budget comes from the state, records show.

Ortiz faulted Acevedo for failing to first raise his concerns with the center and complained that the yearlong audit has disrupted the center's operations.

He called the audit overblown in parts, such as $4,600 charged for expenses on the Puerto Rico trip. Employees themselves paid for most costs such as airfare, he said.

"I've been through an IRS audit, and I thought that was painful," Ortiz said. "This was like giving birth without any pain medication in your kitchen. They occupied our time for more than a year. I think the whole thing was politically motivated."

Acevedo, a former Cook County sheriff's deputy who once provided security for one of the center's methadone programs, said he called Vasquez twice attempting to discuss the complaints. He said his calls went unanswered. After that, he said he forwarded the complaints to authorities.

Omar Lopez, the center's board chairman who also is director of a Humboldt Park AIDS outreach program called CALOR, similarly questioned the need for a full audit involving investigators brought in from Springfield.

But he acknowledged that the center needed better oversight.

"At the board level, we need to really tighten up, beginning with myself as chairman," he said. "We need to be more vigilant."

In two years, the audit showed that Vasquez billed the state more than $26,000 for food, beverages and gas. But about half of the food and beverage receipts lacked dates that would allow verifying that they were business-related.

Although Vasquez was given a vehicle for business and personal use, his gasoline charges looked odd to auditors, such as buying gas twice within one or two days 43 times in two years, or one multiple gas purchase made at the same station within five minutes.

Vasquez also charged $1,400 to Home Depot on the center's account, paying sales tax even though the organization is exempt from sales tax. He failed to document what he bought or how the materials were used.

As head of the mental health center, Vasquez approved buying and leasing property from another organization he directs, the Alliance for the Development of Latino Communities.

Such overlapping affiliations are supposed to be disclosed in financial forms, but they were not, according to the audit.